Assessments of the multiple regulator model
DRAFT FINDING 3.1 The multiple regulator model appears to be operating reasonably effectively given the intrinsic difficulties of having 10 regulators administer and enforce one law. However, the limited evidence available on regulators’ resources and performance makes definitive assessments difficult. Enhanced performance reporting requirements (Draft Recommendation 4.2) would help address this limitation.
DRAFT FINDING 3.2 The Australian Consumer Law (ACL) regulators communicate, coordinate and collaborate with each other through well developed governance arrangements, and have mechanisms in place to promote consistent approaches to the interpretation and application of the ACL. Nevertheless, the multiple regulator model allows for differences among jurisdictions in approaches to aspects of their administration and enforcement of the ACL, which likely create inconsistent outcomes for consumers and for businesses.
INFORMATION REQUEST The Commission invites further comment and detailed information on: • the nature of inconsistencies, including specific examples, in the approaches of the ACL regulators to administration and enforcement • the materiality of these inconsistencies for consumers and/or businesses • options for addressing inconsistencies across ACL regulators.
DRAFT FINDING 3.3 ACL regulators have developed policies and protocols to implement strategic and proportionate approaches to compliance and enforcement, including prioritising matters that represent higher levels of risk to consumers. The extent to which these are implemented in practice is likely to vary across regulators.
The generic national product safety regime
DRAFT RECOMMENDATION 4.1 The State and ACT governments should relinquish their powers to impose compulsory recalls or interim bans. This would signal that it is the Commonwealth’s responsibility to immediately respond to all product safety issues that warrant a compulsory recall or ban. In parallel with any such change in responsibilities, there should be a mechanism for State and Territory governments to raise and provide input on product safety matters to the Australian Competition and Consumer Commission (ACCC) that they consider would warrant a compulsory recall or ban.
DRAFT FINDING 4.1 The Commonwealth Government’s regulation impact assessment requirements may impede the timely implementation of national interim product bans. There is a case to amend the requirements to exempt interim bans from such assessments. Permanent product bans should continue to be subject to the existing regulatory impact assessment requirements.
DRAFT RECOMMENDATION 4.2 ACL regulators should publish a comprehensive and comparable set of performance metrics and information to enhance their public accountability and enable improved regulator performance. Consumer Affairs Australia and New Zealand (CAANZ) could be charged to develop a reporting framework with a view to providing meaningful metrics and information on: • resources expended on regulator activities • the range and nature of regulator activities • behavioural changes attributable to regulator activities • outcomes attributable to regulator activities.
A national database
DRAFT FINDING 4.2 A national database of complaints and product safety incidents has merit. It would enable better identification and analysis of consumer hazards and risks, and help focus ACL regulators’ compliance and enforcement activity. CAANZ should examine the impediments to establishing such a database, its likely benefits and costs, and, subject to the findings of that analysis, develop a plan to implement such a system. CAANZ should also consider what information from the database should be publicly available.
Enforcement tools and penalties
DRAFT FINDING 4.3 There are some small differences in the enforcement powers of the ACL regulators across jurisdictions. There is scope to improve consistency in infringement notice powers and other additional remedies that the States and Territories have introduced to augment the ACL ‘toolkit’.
DRAFT FINDING 4.4 Australian governments should increase maximum penalties for breaches of the ACL. They should consider the option, being examined by CAANZ, of aligning them with the penalties for breaches of competition provisions in the Competition and Consumer Act 2010.
Interaction between ACL and specialist regulators
DRAFT FINDING 5.1 While interaction between ACL and specialist safety regulators generally works well, some changes are warranted. Options to improve the response to product safety concerns currently dealt with by joint ACL and specialist regulators’ actions include: • instituting formal arrangements to guide cooperation and coordination between building regulators and ACL regulators, and between the ACCC and some national specialist safety regulators • expanding the regulatory tools and remedies available to specialist safety regulators (or at least developing a process to allow them to better harness the national reach of regulatory powers under the ACL) • introducing greater consistency of legislation underpinning the specialist safety regime for electrical goods.
INFORMATION REQUEST Are there particular impediments to establishing a lead or home regulator approach at the intrastate and territory level and, if so, how might those impediments be addressed?
INFORMATION REQUEST Is introducing or expanding data sharing among specialist regulators themselves, and between specialist regulators and ACL regulators, feasible? Where might it occur (and how might it be introduced)? What might be the benefits of introducing or expanding data sharing arrangements in terms of improving the interaction between ACL and specialist regulators?
INFORMATION REQUEST Where are there ‘gaps’ in the regulatory powers of specialist safety regulators that require them to have recourse to ACL regulators’ powers to address product safety issues within the specialist regulators remit? What changes might be made to ‘fill the gaps’ in the specialist safety regulators’ toolkit of remedies and what might be the implementation pathway to provide those additional powers?
INFORMATION REQUEST What is needed to progress the move to national consistency among all State and Territory electrical safety regimes?
Industry specific consumer regulation
DRAFT FINDING 6.1 Australian governments should review, and revitalise as necessary, progress in relation to Recommendation 5.1 from the Productivity Commission’s 2008 Review of Australia’s Consumer Policy Framework. That recommendation called for a process to review and reform industry specific consumer regulation that would, among other things, identify unnecessary divergences in state and territory regulation and consider the case for transferring policy and enforcement responsibilities to the Commonwealth Government.
INFORMATION REQUEST Are there gaps or deficiencies in the current dispute resolution services provided by the ACL regulators that a retail ombudsman would fill? What incentives would attract retailers to sign up to such a scheme and observe its determinations? How could the scheme be funded? The Commission seeks further detail on the extent to which the dispute resolution services offered by the State and Territory ACL regulators meet/fall short of the Commission’s 2008 recommendation for effective, properly resourced, government funded alternative dispute resolution (ADR) mechanisms that deal consistently with all consumer complaints? Does the case for the ADR review mechanism as outlined in 2008 remain? Are there impediments to its implementation and, if so, how could these be addressed?
DRAFT FINDING 6.2
There is scope to improve the transparency and effectiveness of the dispute resolution services provided by the State and Territory ACL regulators through: • applying the Commonwealth Government’s Benchmarks for Industry Based Customer Dispute Resolution Schemes to the services provided by the ACL regulators • establishing a formal cooperative mechanism between the various regulators, alternative dispute resolution schemes and other stakeholders to reassess every five years the nature and structure of alternative dispute resolution arrangements to achieve best practice and address redundancies or new needs — as per recommendation 9.2 from the Commission’s 2008 Review of Australia’s Consumer Policy Framework.
INFORMATION REQUEST To what extent have consumers received an additional benefit from the New South Wales super complaint pilot? Has it resulted in an additional burden for the regulator or businesses? Are there gaps in the current activities of the ACL regulators that this process would fill?
Research and advocacy as inputs into policy
INFORMATION REQUEST Is there still a need for additional funding for consumer policy research as envisaged in the Commission’s 2008 Review of Australia’s Consumer Policy Framework?
DRAFT FINDING 6.3 In its 2008 Review of Australia’s Consumer Policy Framework, the Commission identified material gaps in consumer input in policy processes. The Commission considers that recommendation 11.3 from the 2008 report — which in part directs the Commonwealth Government to provide additional public funding to support consumer advocacy — should be revisited.The draft report accordingly identifies the following 'key points' -
• Despite the adoption of a single Australian Consumer Law (ACL) in 2011, Australia’s consumer protection framework remains complex:
– Two Commonwealth and eight State and Territory regulators administer and enforce the generic ACL.
– Numerous specialist safety regulatory regimes complement the ACL.
– Redress is provided via ombudsmen, tribunals and courts, as well as most ACL regulators.
• The multiple regulator model for the ACL appears to be operating reasonably effectively given the intrinsic challenges in having 10 regulators administer and enforce one law.
– The ACL regulators communicate, coordinate and collaborate with each other through well developed governance arrangements.
– Some regulators have been criticised for undertaking insufficient enforcement. Limited resources may partly explain this.
– However, the limited evidence available on regulators’ resources and performance makes definitive assessments difficult.
• There is scope to strengthen the ACL’s administration and enforcement. Matters to be addressed include:
– developing a national database of consumer complaints and incidents
– providing all State and Territory ACL regulators with the full suite of enforcement tools
– increasing maximum financial penalties for breaches of the ACL
– exempting interim product bans from Commonwealth regulatory impact assessments
– centralising powers for interim product bans and compulsory recalls in the ACCC
– improving the transparency of the resourcing and performance of the ACL regulators.
• The ACL regulators and specialist safety regulators generally understand the delineation of their remits and interact effectively, notwithstanding a handful of problematic cases. Consumers and suppliers are not always clear about which regulator to contact but they are typically redirected to the right regulator in a timely manner.
• Interactions between ACL and specialist safety regulators could be enhanced through:
– greater information sharing between ACL and specialist regulators
– addressing deficiencies in the tools and remedies available to specialist regulators
– regular national forums of building and construction regulators
– greater national consistency in the laws underpinning electrical goods safety.
• Governments should revisit previous Productivity Commission recommendations on industry specific consumer regulation, consumer dispute resolution, consumer research and advocacy, and access to justice.